In the U.S., the Minerals Management Services (MMS) of the U.S. Department of the Interior have allocation reporting requirements for all operators of onshore and offshore Federal and Indian oil and gas leases. Such reporting requirements are used to determine and distribute taxes and royalty revenue back to individual leases. Additionally, working interest owners of wells on oil and gas leases typically have allocation requirements to distribute sales revenues back to the individual working interest owners. These taxes, royalty fees and sales revenue associated in the production of oil and gas are substantial. Accurate and precise methods of allocation are important for the equitable distribution of such royalties, taxes and sales revenue. However, current methods of allocation are often less than accurate or precise. This is particularly true where royalties, taxes and sales revenue of commingled production streams must be allocated back to wells, leases and/or oil bearing formations having different owners and/or tax rates.
In addition to the potential disparity in ownership and tax rates, certain technical difficulties render current methods of allocation of taxes, royalty fees and sales revenue inexact. One such difficulty is that production streams commonly undergo phase changes due to varying temperature and pressure conditions that are often prevalent during the production and transport of hydrocarbon production streams, therefore yielding different proportions of gas and liquid from one measuring point to another.
For the allocation of a single production stream to a single working interest owner, such phase changes do not have a significant impact on the allocation of taxes, royalty fees and sales revenue to that working interest owner. However, such phase changes for commingled production streams can have a substantial impact on the allocation of taxes, royalty fees and sales revenue to multiple working interest owners. For instance, individual production streams with dissimilar gas, liquid and/or molecular composition undergo different phase changes during production and transport. Moreover, an individual production stream commingled with another stream will often experience a different phase change than that of an individual production stream passing through the oil and gas production process in isolation. Simply stated, commingled production streams (assuming dissimilarity in their respective gas and liquid compositions) will interact and influence the phase change of each other, making the determination of gas-liquid composition of each individual production stream inexact using current measurement and allocation methods.
Although these technical difficulties seem inconsequential given that the total mass of the production streams are constant, measurement and allocation systems are the basis of revenue assignment between all the affected parties (i.e. working interest owners, taxing authorities, etc.), and the real value of hydrocarbons in the form of gas (e.g. natural gas) and liquid (e.g. crude oil) are seldom equal. Therefore, each commingled stream's correct portion of the final gas and liquid streams should be known in order to ensure equity in the fiscal assignments. This is particularly important where ownership disparity and/or different tax rates amplifies inequitable fiscal assignments among the working interest owners. In light of these practicalities, the current measurement and allocation methods have only partially succeeded in ensuring equity in the fiscal assignments.
One current method of measurement and allocation is the plain proportional method, which is a non-modeled approach. In the plain proportional method, no phase modeling or phase calculations are conducted. Measurements from gas and liquid reference meters at the end of the oil and gas production process are simply proportioned back to the commingled input streams (e.g. streams A, B, and C) in accordance with the following equation (example of Stream A calculation):
            StreamA      Liquid        =          Reference      ⁢                          ⁢              Meter        Liquid            ×              (                              Stream            ⁢                                                  ⁢                          A              Liquid                                                          ∑                                                S                  ⁢                  tream                                ⁢                                                                  ⁢                A                                      →                          C              Liquid                                      )                        StreamA      Gas        =          Reference      ⁢                          ⁢              Meter        Gas            ×              (                              Stream            ⁢                                                  ⁢                          A              Gas                                                          ∑                                                S                  ⁢                  tream                                ⁢                                                                                          ⁢                                                                                        ⁢                A                                      →                          C              Gas                                      )            
Although the plain proportional method of allocation is commonly used, the plain proportional method assumes all streams under go the same phase behavior. It also ignores density and gas composition difference between the streams, both of which can have a substantial impact on the accuracy of the allocation.
Another method of measurement and allocation is the equation of state (EoS) method, which is another non-modeled approach. In the EoS method, each stream is individually evaluated via an equation of state as if the stream passes through a gas and oil production process in isolation. Equations of state are known in the art and are commonly used to predict and describe the physical properties of fluids, mixtures of fluids, and solids. Equations of state include the Soave-Redlich-Kwong Equation and the Peng-Robinson Equation.
During the EoS method, an equation of state is typically utilized to the liquid portion of the commingled production stream to produce two variables, the Shrink Factor and the Flash Factor. The Shrink Factor (SF) represents the amount of liquid volume reduction encountered during the production process due to the evolving of gas out of solution. The Flash Factor (FF) represents the amount of gas volume that is created within the process out of the liquid solution. More particularly, the SF is the ratio of the liquid volume at the end of the production process over the volume at the beginning of the production process. The FF is the reciprocal of the SF. The volume, pressure and temperature of one or more production streams are typically measured at inlet separator of the production process and are used in the selected EoS to determine the SF and FF.
Once the SF and the FF are determined, a Theoretical Oil (liquid) Volume (TOV) and Theoretical Gas Volume (TGV) is determined as follows:TOV=Metered Oil Volume×SFTGV=Metered Gas Volume+TOV×FF
Once the TOV and TGV are determined, the plain proportional method is followed, as shown below, with the exception of using the “theoretical volumes” that are a product of the EoS application (Example of stream A calculations):
            Stream      ⁢                          ⁢              A        Liquids              =          Reference      ⁢                          ⁢              Meter        Liquid            ×              (                              TOV            A                                ∑                          TOV                              A                →                C                                                    )                        Stream      ⁢                          ⁢              A        Gas              =          Reference      ⁢                          ⁢              Meter        Gas            ×              (                              TGV            A                                ∑                          TGV                              A                →                C                                                    )            
Although the EoS method is a significant improvement over the plain proportional method, the EoS method still does not account for the interaction between the different fluids because the EoS method assumes their respective phase changes happen in isolation. Also, it does not account for the re-gasification of gas condensate in the intra-process recycle streams, which requires an iterative mathematic procedure to resolve.
Consequently, there is still a need for a system to accurately predict and assign the final quantities of gas and liquid independently to the individual commingled streams. More particularly, there is a still a need for an allocation method that accurately accounts for: (1) gas to liquid and liquid to gas phase changes of commingled streams within the oil and gas production process; and (2) the interaction between the different fluids in a commingled stream.